State institutions abandoned free softwares due to formal reasons and the government’s regulations will not halt their unstoppable desire to spend, Latvian Open Technology Association (LOTA) Board member and HansaWorld Latvia owner Edmunds Sprudzs (Sprūdžs) told the business news portal BNN, also touching upon the process of e-signature introduction and a bunch of Latvia’s flaws in the IT sector, at the same time asserting we are not a target of serious hackers.

HansaWorld Latvia owner Edmunds Sprudzs

What is your opinion about Business Software Alliance policy of intimidation and betrayal?

I say pirates are pigs and they should not do that. Of course, we can discuss whether the severity of Business Software Alliance against alleged pirate softwares users is adequate. I do not believe piratism can be tackled with repressive methods. The biggest the softaware market, the smaller the price of a single programme licence.

Is it appropriate for state institutions (the Enterprise Register and the Ministry of Interior) to shift from expensive and free softwares and vice versa?

They abandoned free softwares, because of formal reasons. The crisis was too short for them to get used to saving. The government’s regulations will not halt their unstoppable desire to spend. I believe a solution would be tieying public authorities pay to their performance after qualitative and quantitative indicators (in accordance to their duties) and the spent funds. They would get bonuses only if the tasks were carried out by making use of less money than planned in the 2011 state budget.

In what way is the untapped potential of Open-source software in Latvia huge?

The functional difference or commercial products advantage over home-developed ones has dropped considerably during the past years. Now we can move forward. The open-source software is not a panacea, it does not fit for all, but it is a way to improve the IT sector development.

How much would small and medium standard offices save?

It is not the right approach to speak about saving. The economy could be several hundreds of lats per one position to be also multiplied by the number of computers, and you do not have to pay for software updating every three years either. The saving is not that important in my business, but it does matter a great deal in retail with POS machines. The good thing is program compatibility and the fact you have not locked-in with a single supplier. As a businessman you run less risks with an open-source software. The start-up of micro enterprises would be cheaper with it as well. Commercial products are too deep in the Latvian educational system and the tone the state communicates with businessmen in. The situation is unequal. If users were no longer discriminated when opting for an open-source software, our LOTA mission would be over.

A sensible businessman would never do that, as he takes decision based on the business situation, not on the fact it is fashionable to store data on «a cloud». Ok, it is true, data storage quality has improved and prices dropped. It is an alternative worth considering. However, there are pros and cons. I am not among those declaring this the only possible future, because I know the technical base (applications) might never be possible to distribute.

Your blog criticized Latvian Education Information System and Joint Municipal Information System as being expensive and lagging behind the current tendencies some ten years. Will you offer dismantling these systems created with tax payers money?

Dismantling is always tricky, even if the system barely works. We cannot recover the money by dismantling it. What to do next time not to create such damaged systems? The Coalition Council chooses the priority projects of the Information and Communication Technology (ICT), although they do not have a clue about the content of them. While what is clear for them is how many millions must be pumped out of their ministries. It is not acceptable from the perspective of IT businessmen.

Janis Reirs has previously pointed out the maximum number of e-signature users in Latvia might comprise 35% of all the economically active population – 400 000. Why did e-signature project fail, although it was already allocated 2.9 million lats by late 2009?

I forecast state institutions will not give up, making the Latvia State Radio And Television Centre to renew the topicality of the e-singature project. According to information available to me, the e-signature system cannot pride itself as being very technically advanced, due to low standards and difficulties to maintain it. But the commercial banks announcement was the most banal of all, «Sorry, guys, your e-signature is not as safe as our users identification technologies!» That is a huge flaw of the state! E-signature applicability was limited, because relevant services are emerging only now, when it is too late. Personally, I do not have it yet, as I have to spend several weeks in paperwork.

The government plans spending 17 million on e-health project, while Estonians have managed to pull that though for 1.7 million lats. Would it be too impolite not to reinvent the wheel, but purchase the technology form the neighbours?

The problem is not in the abstract figure (17 million), it is the fact it has not been clearly stated whether e-health introduction will save the health care sector 34 or 50 million a year? We cannot compare these two. What Estonians have made for 1.7 million lats is not the same we want. Latvian pride suffers, of course. Theoretically, the money should be left in family – IT businessmen, however there are sectors we as a small state cannot dominate. Maybe we should buy this technology from Estonians for 0.5 million lats and develop it further?

Do we need a special assignments minister for IT matters or a secretariat?

A secretariat would not help. LOTA suggests creating a post of Chief information officer with a power similar to a vice prime minister’s, so that the person could supervise other ministries and require reports on why this or that IT project is not moving on as planned. The post should have the same veto rights as the Minister of Finance or Justice.

When will Latvia have e-elections as in the United States?

E-elections is a tricky matter with great risks and threats to the yet immature civil society of Latvia. Currently, each state and municipal authority is learning from its own mistakes in IT projects, without coordination at a state level and a central apparatus. There are no common information and documents circulation principles.

Should ministries, the President and the Saeima be afraid of international hacking syndicates?

Latvia is not the target of serious hackers, but cyber security issues must be in order at all times, that is for sure. This should be included in the Cabinet of Ministers regulations. A panacea against all cyber attacks would be creation of the alredy mentioned IT sector management.

Was Neo (Ilmārs Poikāns) actions of leaking the State Revenue Service (SRS) data right?

At least we can be glad the officials got some tough times. On the other hand, Mr Poikans resources were not sufficient to see what information will be a harm to the society, instead of a favour. Poikans similarly as WikiLeaks did keep the SRS nervous. However, it was a crime according to the legislation of Latvia. There can be some legal nuances, it depends. I’d not say I am an advocate of his, but I am not denying I even like him to a certain extent.

What salaries do specialists of your field get?

It is about 300-400 lats for students. Clever junior programmers get up to 1 500 – 2 000 lats, while its up to 4 000 a month for excellent project managers.

The rumour had it 1.5 years ago the Latvian Information and Communications Technology Association had a «team of five» aiming at taking over the IT outsourcing from the state institutions. These five included Lattelecom, Lursoft, software developers Exigen Services and Tieto Enator Alise, accounting software Horizon developer FMS. Can you compete with this unofficial business syndicate?

It would be bad if the state did not save anything. If the outsourcing chaos had been transferred to these five, it would have been even bigger. They offered it, when it was clear the crisis was here to linger. They have already abandoned the idea. We can apply for the ERDF funds for projects worth millions, but we will get the minimum, because of differences in software platforms. The problem is the government is not heading the IT sector towards sustainable growth, instead wasting ERDF funds for short-term solutions. Estonians are doing the opposite, thus they will be able to export their IT sector achievements and make profit in a long-term.

Does remote control software HansaWorld Enterprise permit businessmen to operate in several countries markets at the same time?

Yes, it does. It ensures easy decision taking process and a perfect online remote control with slow Internet connections. Even in the middle of a desert or forest. This is already a historical phenomenon, as the base of the system was founded before 1990.

You offer introducing efficient instruments of the West to the public sector of Latvia, it is a serious challenge. Why was HansaWorld Latvia excluded from further participation in the tender on financial accounting and personnel management systems supply to the Ministry of Finance and its respective authorities?

No one not close enough to the state «affairs» can guarantee itself a contract providing predictable volumes, profit and a capital coming back in 12 months. It might be the 25% limit for part-time employees does not cause any problems to some companies employing hundreds of people with monthly earnings not reaching the average of the sector. While 25% is not enough in my company, when I employ four IT students on a probationary period and from home. We work when we have some tasks, we are not simply sitting idly eight hours in a row, when there is nothing to do. Hence we were punished. This dishonest tender has caused us actual losses. I am operating not solely in mine, but in the interests of the whole sector. Many small companies of different sectors have expressed us their support, agreeing that the Ministry of Finance criteria s is impossible to meet.

Latvian Employers’ Confederation (LEC) is worried about ongoing events and their negative effect on the stability and future development of the country’s economy. LEC believes that stabilization of the financial situation requires careful coordination of actions between institutions and the government.

Compared to December 2017, level of producer prices in Latvian industry rose by 0.9 % in January 2018. Prices of products sold on the domestic market went up by 1.2 % and prices of exported products by 0.6 %.

Russia is trying to use the established situation to create chaos in Latvia. Efforts, however, are fated to fail, says chairman of Saeima’s Defence, Internal Affairs and Corruption Prevention Committee Ainars Latkovskis.

Latvia’s Finance Minister Dana Reizniece-Ozola has failed to prevent the decision made by United States Department of the Treasury, which is ruinous for the country’s financial sector and humiliating for its reputation, says chairman of New Conservative Party Jānis Bordāns.

Considering events of the last several days in the country’s banking sector and the arrest of the governor of the Bank of Latvia – Ilmārs Rimšēvičs – it is entirely possible that someone is currently realizing a massive information operation. Its structure and execution is not unlike the one observed in USA, France and Germany during the pre-election period, BNN was told by Latvia’s Defence Ministry.

«This situation is incredibly complicated. This situation is quite possibly the most complicated one I have ever been in. I feel a great deal of support from people I don’t know, as well as my friends and family members. I have decided to not back down – I am innocent. The the people attacking my reputation have only one goal in mind – to have me step down,» said the governor of the Bank of Latvia Ilmārs Rimšēvičs during a press conference on Tuesday, 20 February.

The number of people working in Latvia’s culture sector is equal to 4.5% of the total number of employed people in the country. This proportion is also larger than the average one across the European Union, according to data published by Eurostat.

Considering that Latvia’s Education and Science Ministry has several ongoing industry reforms, it would be best to put the proposal for compulsory secondary education on hold, said Education and Science Minister Kārlis Šadurskis during a meeting of Saeima’s Education, Culture and Science Committee.

Association of Latvian Commercial Banks sees a need for the European Central Bank (ECB) to become more involved in the discussion and help resolve the situation, considering evaluation of ABLV Bank’s business model is in direct competence of ECB.

The largest fast food catering restaurant network in Finland and Baltic States – Hesburger – plans to invest approximately EUR 11.5 million in business development this year. EUR 5.5 million are planned to be invested in Latvia’s market, says Hesburger Development Director Ieva Salmela.

On Tuesday, 20 February, air temperature in central and northern parts of Finland dropped to -27° C… -31° C in morning hours. In Norway, close to the Finnish border, air temperature has dropped as far as -34° C, according to data from meteorological stations.

It is not impossible that someone may want to undermine Latvia’s financial sector, said chairman of Latvian Finance and Capital Market Commission Pēters Putniņš in an interview to Rīta Panorāma programme on Tuesday, 20 February.

There are serious risks associated with European Union’s co-financed project for the revitalization of Skanste neighbourhood, including construction of Skanste tramway line, says member of Riga City Council and For Latvia’s Development party Viesturs Zeps.

Latvia’s society believes the KGB documents should be made publicly accessible immediately. In addition, residents say they are confident in their ability to discuss those documents without the country’s supervision, which takes the form of expert opinions prevailing over society’s moral views, as stated by guest researcher of History Institute of the University of Latvia M. His. Marta Starostina.

«What we have observed in the past several days is that Latvia’s financial sector has received several heavy strikes as a result of the government’s uncoordinated and chaotic actions. Prime Minister Māris Kučinskis has evidently ‘disappeared’ and offers no clear plans to resolve the crisis, whereas Finance Minister Dana Reizniece-Ozola says different things in every interview. Such behaviour will not help resolve the crisis. It could instead pull the country’s financial sector in a much deeper crisis,» says chairman of For Latvia’s Development Juris Pūce.

As a security measure, the governor of the Bank of Latvia Ilmārs Rimšēvičs has been applied with a prohibition to take post, said Latvian Prime Minister Māris Kučinskis after a meeting of the Cabinet of Ministers.